Bangladesh and India signed a historic agreement on Saturday to simplify their border by exchanging more than 150 enclaves of land.
India's Prime Minister Narendra Modi ratified the deal with his counterpart Sheikh Hasina in Dhaka, BBC reported.
Thousands of Bangladeshis inhabit more than 50 enclaves in India, while Indians live in around 100 areas within Bangladesh. The countries will now swap territories and residents can choose where to live.
Bangladesh Foreign Minister Abul Hassan Mahmood Ali described the agreement as "a historic milestone in the relationship between the two neighboring countries."
More than 50,000 people currently live in tiny enclaves, citizens of one country but located in the other. Under the agreement, both sides will swap the enclaves enabling their citizens to finally reside in their own countries. The enclaves along the 4,000 km border are a legacy of colonial times and have been a contentious issue between the two nations for decades. Inhabitants are in effect stateless and lack access to public services.
Following the deal, citizens will be able to choose where they want to live and which nationality they would prefer.
Ali said the two countries would also sign a number of deals to boost trade and security along the border and fight human trafficking.
The territorial dispute dates back to colonial times and has been a contentious issue since. Relations between Bangladesh and India have improved under the government of Sheikh Hasina, and Modi has also made it a priority for his foreign policy.